Analysis Topic: Economic Trends AnalysisThe analysis published under this topic are as follows.
Monday, February 09, 2015
In 1958, economist W.H. Phillips wrote a paper that argued an inverse relationship existed between wage inflation and unemployment. The crux of his theory was when unemployment is high wage growth is absent; but when the unemployment rate is low wages rise rapidly. Philips established his theory under the framework of a curve and it was aptly referred to as “The Phillips Curve”. However, many economists wrongly adopted the Phillips Curve by relating it to general price inflation, rather than to just wage inflation. Sadly for Phillips Curve enthusiasts, the high inflation and high employment rates of the 1970’s turned this metric on its head.Read full article... Read full article...
Monday, February 09, 2015
Trade Data Show China’s Credit Bubble is Bursting, UK to See Deflationary Effects – Global Depression Ahead? / Economics / China Economy
- Chinese imports, primarily of raw materials, crashed 19.9% in January
- Exports fall 3.3% against expectations of 6.3% rise
- Total Chinese debt rose from $7.4 trillion in 2007 to $28.2 trillion in 2014
- Capital outflows last quarter were the highest on record
- China may devalue yuan to boost exports
- Currency depreciation by worlds biggest exporter may trigger global deflation and depressionRead full article... Read full article...
Saturday, February 07, 2015
How Economic Aggregation Hides the Problems of Interventionism / Economics / Government Intervention
Gary Galles writes: I was going through the textbook for my economics principles course recently, thinking about how I could better reconcile the fact that since only individuals choose, the logic of economics is about individual choices facing the fact of scarcity. Yet macroeconomics is generally presented directly in terms of aggregates and how to control them, as if aggregates were the relevant measures.Read full article... Read full article...
Friday, February 06, 2015
Greece To Leave The Euro or Not to Leave The Euro, That is The Question / Economics / Eurozone Debt Crisis
As we watched the Prime Minister and the Finance Minister of Greece travel though Europe in a failed attempt to re-negotiate the terms of the "Bailout" it received, we find ourselves thinking quite differently to the mainstream commentators. Ours is not a jaundiced view but a realistic one. Pragmatism demands we do so. The prime underlying factors that will be brought into play are the interests of each side.
After all, countries don't have friends they have interests, even with fellow members of the Eurozone. These will dictate the result and likely the tactics on each side. We do not see these as friendly negotiations at all. For Greece the stakes are higher than they are for the E.U.Read full article... Read full article...
Friday, February 06, 2015
“Forgive Us Our Debts” – Only Way To Prevent Economic Meltdown / Economics / Global Debt Crisis 2015
- Europe and western world is in a debt-fuelled deflation which is spiralling out of control
- Global debt has risen a massive $57 trillion or more than 25% in 7 years since the crisis of 2008
- Managed debt forgiveness is essential now to avoid chaos of defaults, mass unemployment depression and economic collapseRead full article... Read full article...
Tuesday, February 03, 2015
John P. Cochran writes: Pierre Lemieux wrote an indispensible book (Somebody in Charge: A Solution to Recession) for anyone who wishes to understand the before, during, and immediate aftermath of the “Great Recession.”
The book’s importance is greater than just his analysis of the crisis. He thoroughly exposes the underlying weaknesses and fallacies of the whole Keynesian policy-activism agenda driven by the “animal spirits,” the irresistible urge to action of those who wrongly deem themselves in charge.Read full article... Read full article...
Monday, February 02, 2015
The fears after 2001 were that the Fed’s easy money policies to pull the economy out of the 2001 recession, followed by even more easing, including the near-zero Fed Funds rate instituted after the 2008 financial meltdown, would result in runaway inflation.
Spiraling inflation was so sure to show up that gold, the historical hedge against inflation, surged up in a powerful 10-year bull market, rising from $250 an ounce in 2001 to $1,900 an ounce in 2011.Read full article... Read full article...
Friday, January 30, 2015
U.S. Asset Price Deflation Coming Up? Food Prices Drop? CPI Negative? Credit Deflation? / Economics / Deflation
When inflation alarmists want to convince everyone the dollar is about to become worthless, they post this chart of the CPI.Read full article... Read full article...
Friday, January 30, 2015
A week ago we learned that the king of Saudi Arabia, Abdullah bin Abdulaziz Al Saud, passed away at the age of 90. Following the announcement, crude oil immediately spiked 2.5 percent over uncertainty of how this might affect the Middle Eastern kingdom’s position on keeping oil production at current levels.
But the new leader, King Salman bin Abdulaziz Al Saud, has already tamped down this uncertainty, stating that Saudi Arabia will hold to the decision made at last November’s Organization of Petroleum Exporting Country (OPEC) meeting.
Tuesday, January 27, 2015
John Cochran writes: Mises Institute: You recently retired after a long time at Metropolitan State University of Denver, where you were both an economics professor and the dean of the Business School. How did you end up there, and end up as dean?
John Cochran: I had a good guardian angel who helped me come to Metro State. I’m not sure about that on becoming dean, though. I received my undergraduate degree in economics from Metro State. Gerald Stone, then chair of the econ department, and Ralph Byrns were two of my professors there. As I worked on my graduate degrees at University of Colorado-Boulder, I would occasionally stop by Metro just to touch base. In spring 1981, I was just completing teaching my first principles course at UC-Boulder and had just completed the requirements for an MA in economics. The first edition of the Byrns and Stone principles book would be available for fall 2001. Metro had an open visiting position and had offered the job to a recent CU PhD. He had told them he would take their job, but wouldn’t use their book. Ralph and Jerry were talking it over and Ralph said to Jerry, “We can’t hire him.” Jerry said, “We can’t not hire him just because he said he won’t use our book.” Ralph replied, “But he is telling us he will be a ‘lunch tax’.” Jerry said, “Yes, but who else can we get?” [A “lunch tax” is a high-maintenance employee. — Ed.]Read full article... Read full article...
Monday, January 26, 2015
Predrag Rajsic writes: Imagine you are a promising car mechanic who wants to open a new car repair shop. You would like to provide basic services to low-income citizens at affordable prices. You would charge a bare minimum for your labor, and you would buy used (but decent) replacement parts. This service would be great for people who just want to keep their cars running for a couple more years — nothing fancy, just bare functionality.Read full article... Read full article...
Monday, January 26, 2015
Greece Votes for Syriza Hyperinflation - Threatening Euro-zone Collapse or Perpetual Free Lunch / Economics / Eurozone Debt Crisis
Greeks voted for Syriza as the largest party on 36.5% that puts the radical left party within a couple of seats of securing a majority of 151 seats in Greece's 300 seat parliament which includes automatically getting allotted an extra 50 seats. So Syriza rather than to seek to form another coalition government that tend to be the norm in Greece has a chance of going it alone. The people of Greece having had enough of near 5 years of economic austerity that had yet to fully succeed in correcting the preceding decade long partying spending and corrupt kickbacks binge at the euro-zones expense. Now the people of Greece have effectively done a deal with the devil that promises to return Greece to the good old party days of rampant debt printing (fake government debt statistics) and corrupt governance all without the consequences of accelerating double digit inflation as a consequence of being within the euro-zone.Read full article... Read full article...
Sunday, January 25, 2015
Brendan Brown writes: Amongst the big winners from the Obama Fed’s Great Monetary Experiment has been the private equity industry. Indeed this went through a near-death experience in the Great Panic (2008) before its savior — Fed quantitative easing — propelled it forward into new riches. There is no surprise therefore that its barons who join the political stage (think of the last Republican presidential candidate) have no interest in monetary reform. And the same attitude is common amongst leading politicians who hope private equity will provide them high-paid jobs when they quit Washington.Read full article... Read full article...
Saturday, January 24, 2015
Greece is back in the headlines. This should surprise no one. It was naïve to think that Greeks would accept being debt slaves forever.
Despite all the rumblings that Greece will be forced to leave the Euro, there is in reality no mechanism by which EU countries can force a Eurozone member to exit the currency union. It really is all a bluff. This is a standard scare tactic used by governments to induce people to give up freedom for a little security.Read full article... Read full article...
Friday, January 23, 2015
Debt and Deflation: Three Financial Forecasts - There's More Than Falling Prices / Economics / Deflation
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